Biometric transactions may soon replace cash payments: By 2022, mobile biometric solutions will authenticate more than 1 trillion transactions annually, driving the market to $50.6 billion in annual revenue that year, according to a new report from Acuity Market Intelligence.
In this blog, we highlight how biometrics can boost mobile account registrations and offer your customers greater efficiency and security when carrying out payments.
Say goodbye to your password
Traditional username-and-password method of online authentication is currently becoming outdated and replaced with something faster and more convenient like biometric authentication. This allows users to verify their identity by presenting a part of their own body such as a thumbprint.
By 2022, mobile biometric solutions will authenticate more than 1 trillion transactions annually.
For this reason, biometric SIM verification used to verify the respective SIM user by thumb impression or facial recognition, is being adopted at scale by digital financial services providers like telcos and MNOs. Also Biometric authentication has moved into the mainstream in recent times for unlocking smartphones and verifying on-device transactions.
This brand of authentication is also reaching into other areas such as vehicles. Another recent report from Fujitsu predicted biometric authentication will soon become the standard for unlocking and driving vehicles, offering a more secure and personalised option than keys.
Firstly, it offers greater simplicity and convenience for consumers. It enables them to log-in to websites and applications and makes payments quickly without having to recall complex passwords and usernames.
Secondly, it’s a lot more secure; even the most complex password is vastly inferior to biometric authentication. Multiple biometric checks (voice, facial, fingerprints etc.) make it almost impossible for hackers to fool, the phone into giving them access. In essence, your thumbprint or facial features become your password-something that is truly unique and cannot be lost, forgotten or stolen!
Thirdly, it supports remote mobile wallet account registrations which will help reduce unbanked numbers. In 2015, Pakistan became the first country in the world to leverage remote registrations, and it proved to be hugely successful-approximately 50% of new registered mobile wallet accounts in 2015 were opened via biometric verification in 2015, a year when the number of these accounts tripled – from 5 million to 15 million. The use of biometric SIM verification is helping the country to increase its financial inclusion goal from 23% to 50% by 2020.
The lack of proximity to a bank or agent, as well as paperwork requirements, are cited as barriers to account registrations. Biometric capabilities helped customers who are far from banks and don’t have ID cards. Customers in Pakistan, with biometrically verified SIMs, enter a USSD code designated by their providers, to set up an account in less than 30 seconds. The process requires no paperwork and no trip to an agent or branch. As a result, know-your-customer (KYC) requirements have been simplified, and transaction limits for fund transfers increased for customers with biometrically verified SIMs.
While remote account registrations have many benefits, it’s important to mention here that face-to-face customer on boarding remains crucial if you want to promote regular account usage. Focus groups conducted as a part of the Financial Inclusion Insights survey last year in Pakistan show that a lack of education, insufficient awareness about available services, unfamiliarity with options, and perceptions that branchless banking accounts are for the rich are amongst the top six reasons for not registering a mobile money account.
Last, but not least, mobile wallet accounts are an entry point for providers to broaden the mobile money ecosystem – to introduce next-generation services that include a range of convenient payments and a gateway to extra financial services including credit, savings, and insurance. So, it’s vital that registrations and usage are secure and easy!
It must be noted that biometrics is just one tool/strategy to use and in isolation, won’t guarantee increased registrations. Talk to Youtap and we can assist you in how to roll out a go-to market plan which will generate instant results and revenue for your organisation.